Adding a new pool of ETF liquidity to respond to your financing needs


In an economic environment where investment horizons are shortening, ETFs will become more important in allowing fund selectors and investors to be more agile. ETFs are also expected to play an even more crucial role in enabling investors to capture value against specific parts of the yield curve.

Launch of ETF lending solutions

In March we are launching ETF lending solutions enabling clients to add ETFs to their strategic and fails lending pools. We also have enhanced our data universe to a new level of granularity enriching the feature selection for a bespoke lending pool creation.

Adding ETFs as a new asset class to our lending solutions is not only extending the range of securities and loan availability offered through the fails coverage programme, but also creates a wider pool of securities available to clients via the strategic lending programme. The addition of ETFs and the enhanced data selection approach makes our triparty collateral management offering even more attractive to clients.

ETF lending is expected to increase as a source of revenue generation on the investment portfolio of the lenders and as a mechanism for reducing settlement fails. From a financing standpoint, broker-dealer firms are also looking more closely at ETF holdings as part of a wider pool of assets that can be mobilised to access liquidity through collateralised funding transactions.

Lenders: Enhance your portfolio yields and deliver additional liquidity to the market

Lenders will see the perfect opportunity to enhance their portfolio yield when allowing their ETFs to be distributed through the various low touch lending streams, allowing optimal sourcing of liquidity from both our ICSD & CSD.

Key benefits

  • ETF lending offers incremental portfolio returns with the added benefit of no custody fee if a position is lent out, offsetting the total cost of ownership
  • Maximise income by leveraging your ETF pool across all lending streams and across custody locations.
  • Lent securities can be recalled at any point, allowing auto substitutions to smooth this process
  • At any point, the loans are fully collateralised in an automated manner 

Borrowers: Reduce the risk of ETF settlement failure or borrow ETFs longer term for strategic purposes

Borrowers will be able to access ETF securities for strategic trading and liquidity purposes and will extend fails coverage to boost settlement efficiency in ETF secondary markets. The enhanced pool allows borrowers to access broad ETF liquidity catering for their fails curing ensuring timely settlement in either our ICSD or via our CSD/T2S. Through our strategic lending programme, borrowers will be able to use this ETF supply for their long-term needs.

Key benefits

  • A diverse pool of ETFs increasing your liquidity scope
  • Growing ETF settlement efficiency in both our ICSD & CSD/T2S
  • Maximise liquidity by leveraging ETF pools across all borrowing streams
  • Auto substitution maximises borrowers financing

Award-winning collateral management solutions

Clients leveraging our collateral management offering can see improved granularity and optimisation when refinancing their ETF positions within the triparty solution, giving clients more control of their eligibility baskets whilst expanding the scope.

  • Leveraging our OSCAR solution, allowing clients to easily define, create, and negotiate optimised eligibility profiles of collateral baskets
  • Our comprehensive range of collateral criteria can be applied to build baskets tailored to demanding risk strategies.
  • Giving greater control over collateral baskets containing ETFs

One-stop shop for all your ETF needs

Clearstream holds around 50 per cent market share of European-domiciled ETFs under custody and delivers a convenient way for clients to buy and sell ETFs. Our innovative solutions increase process efficiencies benefiting ETF issuers, distributors and investors alike. With our ETF issuance models – cornerstone of the internationalisation of ETFs across Europe – we are perfectly placed to cover the key connections and ensure optimal issuance and post-trade efficiencies for all our clients’ ETF needs.